Executive Summary

Comparing your organization to peer group and world-class organizations

The Hackett Value Grid shows how your baseline performance compares to your peer group and to world-class performers. World-class performance is defined to be the top quartile performance in operational efficiency and effectiveness process metrics.

What is World-Class?

What does it look like, how is it different?

EFFICIENY

World-Class organizations are more efficient, by having:

Lower total costs

Faster cycle time

Higher Productivity

EFFECTIVENESS

World-Class organizations are more effective, by having:

Accurate decision making

Better alignment to business

Optimized working capital

Monitoring performance helps the organization identify process issues before they become a major problem that affects business outcomes.

Hackett group has identified top 15 metrics and benchmarked against the World-Class companies based on efficiency and effectiveness of the processes. In this e-book, we delve deeper into how best-in-class organizations compare with the rest in the order-to-cash (O2C) cycle.

CHAPTER
02

Order-to-Cash Process Metrics

Credit Management

1. Average Days It Takes to Complete New Credit Reviews

Efficiency Metric

Best Practices from World-Class Organizations:

Implementation of best-of breed online credit application

Automated correspondence for missing information such as bank/trade references, backups

Providing real-time tracking of application status

Benefits:

Improve customer experience with greater visibility

Reduced manual errors

2. Automated Versus Manual Credit Modelling Tools

Efficiency Metric

Best Practices from World-Class Organizations:

Automated stakeholder correspondence for all credit decisions

Integrating with country-specific and industry specific credit agencies, public financials and Insurance bureaus

Automated capture of the fields from the credit application form

Benefits:

Standardize credit operation across various platforms

Improved productivity to work on high value customers

Billing and Invoicing

3. Percent of Invoices Generated & Distributed Electronically

Efficiency Metric

Best Practices from World-Class Organizations:

Adopt automated e-invoicing portal

Deliver invoice according to customer preferred channel such as portal and e-mail

Track conversion of customers from paper to e-invoice

Benefits:

Self-service customer portal saves print+ mail costs

Eliminate low-value tasks in billing and invoicing such as dealing with paper, doing back-and-forth

4. Average Time It Takes to Bill

Efficiency Metric

Best Practices from World-Class Organizations:

Self-service customer portal for viewing invoices

Using a single portal which includes all relevant backup documents such as PODs, BOls

Order-to-Cash

15. Process Cost as Percent of Revenue

Keep a track on high-risk customers to ensure there is minimal bad-debt and write-off

Benefits:

Improved working capital and cash flow

Easier cash management

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03

Conclusion

What Drives World-Class A/R Performance?

What should your digital transformation initiative focus on?

It is beyond the point where companies are able to debate whether or not to initiate digital transformation. The question is whether someone disrupts using digital transformation or get disrupted by someone else’s digital initiatives.

To start with the digital transformation journey, finance execs should consider heavy investment in the following areas:

Automation of clerical repetitive tasks across C2C

Core automation means that costs are low and effort is allocated in the right tasks

Single, integrated platform

More effective in delivering services to internal and external stakeholders

AI-driven automation technology

Low-error rates in tasks

Integrated reporting and analytics

Better decision making and insight

Using big-data and machine learning

Improved outcomes of A/R actions – faster, more effective collections

Conclusion

Digital transformation can play a major role in helping peer-group organizations catch up to their world-class competitors. But the reality is that the definition of world-class will continue to evolve as leading finance functions deploy smart technologies to transform themselves.

Thus, the quest for achieving world-class status never ends. Its future will require continuous improvement of cost structure, effectiveness and stakeholder’s perceptions of how finance adds value to the performance of the enterprise.

CHAPTER
04

About HighRadius

HighRadius is a Fintech enterprise Software-as-a-Service (SaaS) company. The HighRadiusTM Integrated Receivables platform reduces cycle times in the order-to-cash process through automation of receivables and payments across credit, electronic billing and payment processing, cash application, deductions and collections.

HighRadius solutions have a proven track record of optimizing cash flow, reducing days sales
outstanding (DSO) and bad debt, and increasing operational efficiency so that companies may
achieve strong ROI in just a few months. To learn more, please visit www.highradius.com

The HighRadiusTM Integrated Receivables platform stands out by enabling every credit and A/R operation to execute real-time from a unified platform with an end goal of lower DSO, reduced bad-debt, and faster dispute resolution while improving efficiency and accuracy for cash application, billing, and payment processing.

HighRadiusTM Integrated Receivables leverages RivanaTM Artificial Intelligence for Accounts Receivable to convert receivables faster and more effectively by using machine learning for accurate decision making across both credit and receivable processes. The Integrated Receivables platform also enables suppliers to digitally connect with buyers via the radiusOneTM network, closing the loop from the supplier Accounts Receivable process to the buyer Accounts Payable process.